Fears of a winter hay shortage have eased, on the back on a good autumn break.
Australian Fodder Industry Association chief executive John McKew said the widespread and substantial break was enough to have an almost immediate impact on demand.
"I was getting a little bit concerned, if we didn't get a break, how long supply would last," Mr McKew said.
"Luckily, the rain has come.
'Our product in April and May is very reactionary to rainfall, so demand stopped very, very quickly, as the rain started to fall, and took the pressure off buying fodder at high prices."
Mr McKew said farmers were holding off buying too much hay, at the moment.
"I wouldn't say we are in an oversupply situation, but there is sufficient supply in the system to sustain us, through the winter months."
He said there were plenty of options, for primary producers looking for hay for bulking feed or to provide additional fibre.
Mr McKew added a cautionary note, advising farmers to take care over quality.
"It's always a good idea, if you can, to take feed tests, to make sure what you are buying is what you need for your enterprise," he said.
"If we don't get too much of a wet winter, and a kind spring, we could be in for a very good harvest at the end of this year.
"You could arguably see some downward pressure on prices, in September and October, at the earliest.
"The caveat on all this is the weather - we see, time and time again, we have a particularly cold, wet winter, and a very dry spring, and all bets are off, as to what we end up with."
Dairy Australia industry analyst Sam Leishman agreed the favourable start to the season had improved pasture availability and pushed down the need for purchased feed.
"Since January, cereal hay prices have eased by up to 40 per cent across the country,' Mr Leishman said.
But he said conditions remained varied, from state to state.
Cereal hay was trading at a 17-50pc discount, compared with June last year, but a dry start in Western Australia and limited fodder availability in Tasmania had kept prices elevated in those regions.
"Now well into winter, the spike in demand usually associated with the cooler weather hasn't been fully experienced,' Mr Leishman said.
"With low volumes currently been traded, and a favourable weather forecast, it's expected supplies will continue to grow, unless demand increases."
Improved winter crop prospects, combined with softening offshore markets, had also started to see local grain prices ease.
"In Australia's south-eastern states, widespread rain and increased soil moisture has provided an optimistic start to the winter cropping season,' Mr Leishman said,
"In comparison, northern and western cropping regions didn't receive significant early rainfall, impacting production forecasts."
The latest Dairy Australia hay and grain report says cereal markets tracked sideways, to slightly lower, week on week.
Lower offshore wheat futures markets softened domestic new crop markets.
Barley markets seemed to have continued to remain steady, and found some stability.
The report also found grower engagement with new crop markets was "limited", with sellers reluctant to accept current prices and take on production risk, this far out from harvest.
Reid Stockfeeds Commodity manager Marcus Dingle said while there was no issue with supply, at the moment, things could tighten by the end of the year.
He recommended farmers continued to chip away at the old crop but advised it was prudent to take out contracts for new supply.
"There is an inverse in the wheat prices from old to new crop, meaning a price differential between the seasons - the new crop is currently at lower prices," Mr Dingle said.
"Barley prices are a gift for new season crop currently and should be strongly considered as prices based on historicals are now attractive.
"Wheat prices have retracted since harvest earlier this year."
Demand for feed had increased, with existing customers maintaining strong buying levels.
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